Next generation access


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Ofcom, the UK communications regulator, discusses policies and plans for providing super fast broadband nationally including an overview of deployment options

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  • Next generation access

    1. 1. Next generation access Tom Kiedrowski, Principal, International 26 March 2009 IIC Telecoms & Media Forum
    2. 2. What I will cover <ul><li>Background </li></ul><ul><li>Current regulatory framework </li></ul><ul><li>Recent developments </li></ul><ul><li>NGA Statement and Variation </li></ul><ul><li>Ethernet Active Line Access </li></ul><ul><li>Outstanding policy issues </li></ul>
    3. 3. Background: the arrival of superfast broadband … … and around the world Source: operators, Ofcom estimates Both in the UK… Virgin Media -20% of UK homes, Dec 2008, whole footprint (50% of homes) by mid 2009 BT announcement – 40% UK coverage by 2012 Virgin footprint Cornwall Act Now – tendering for regional NGA using EU funds H2O: Aim for 88k homes in Bournemouth - 30+ homes connected now BT building FTTH in Ebbsfleet and Olympic Village Community projects H2O: Aims for 55k Dundee homes. Deployment underway Commercial deployments Public sector schemes Digital Region: 500k FTTC homes by 2010/11 West Whitlawburn (Glasgow): 100 FTTH housing association flats, 2009 Wembley: aim for 3.7k apartments with FTTH Walsall: Council proposed FTTH in Birchills ward Titanic Quarter, Belfast: FTTH to ~15k new homes Manchester: Trial FTTH to 450 premises, 2009 Corby: FTTH being deployed to 6k new homes Angus Glens: potential community backed-NGA for villages Salford: FTTH to Media City - 1st phase completing 2010 Derby: proposing 100% NGA availability by 2016 ? Cable FTTC FTTH
    4. 4. Current regulatory framework <ul><li>Wholesale Broadband Access market review (April 2008) </li></ul><ul><ul><li>3 separate geographic markets - two thirds of country deregulated </li></ul></ul><ul><ul><li>BT commitments on price floors expired at end of 2008 </li></ul></ul><ul><ul><li>Commitments on price ceilings expire at end 2010 </li></ul></ul><ul><li>Wholesale Local Access market review (Dec 2004) </li></ul><ul><ul><li>Market defined to include copper and cable, but not fibre </li></ul></ul><ul><ul><li>BT obliged to provide LLU (Shared and Full MPF) and Unbundled Sub-Loops (SLU) </li></ul></ul><ul><ul><li>SLU product based on separate cabinets – has proved uneconomic </li></ul></ul><ul><li>BT Undertakings (Sep 2005) </li></ul><ul><ul><li>Equivalence of Inputs applied to LLU – Shared MPF for Broadband, plus full MPF </li></ul></ul><ul><ul><li>SMPF is an input to IPStream, which is used by BT Retail </li></ul></ul><ul><ul><li>But BT uses very little MPF </li></ul></ul>
    5. 5. Recent developments <ul><li>Market initiatives: </li></ul><ul><ul><li>Virgin Media now offering 50Mb broadband based on DOCSIS 3 </li></ul></ul><ul><ul><li>BT plans to invest £1.5bn in NGA </li></ul></ul><ul><ul><ul><li>Largely in rolling out Fibre to the Cabinet to 40% of UK homes by 2012/13 </li></ul></ul></ul><ul><ul><ul><li>Will be used to provide “Generic Ethernet Access” </li></ul></ul></ul><ul><ul><li>Various FTTH initiatives, largely related to new build </li></ul></ul><ul><li>Policy initiatives </li></ul><ul><ul><li>Ofcom NGA Statement and Variation </li></ul></ul><ul><ul><li>Caio Report </li></ul></ul><ul><ul><li>Digital Britain </li></ul></ul>
    6. 6. NGA statement - key policy messages <ul><li>Ensure fit-for-purpose GEA </li></ul><ul><li>Allow this to be supplied out of Openreach on an EOI basis </li></ul><ul><li>Vary Undertakings accordingly </li></ul>1. Active remedies (ALA/GEA) <ul><li>Significant interest in GEA product </li></ul><ul><li>Active products likely to be required on an on-going basis in significant parts of the UK </li></ul><ul><li>Support passive remedies where there is demand, including collocation </li></ul><ul><li>Prevent foreclosure for future competition </li></ul><ul><li>Duct access as a future possible remedy </li></ul>2. Passive remedies (sub-loop, fibre, duct <ul><li>Significant uncertainty about viability; limited interest </li></ul><ul><li>Sky interested in cabinet collocation </li></ul><ul><li>Pricing freedom on new high-speed (active) products </li></ul><ul><li>Passive remedies priced on cost plus basis, including risk, with fair allocation of all fixed and common costs </li></ul>3. Pricing <ul><li>Commercial case uncertain </li></ul><ul><li>Existing broadband products likely to provide a pricing constraint </li></ul><ul><li>Limited concerns on pricing freedom apart from margin squeeze concerns </li></ul><ul><li>Not progress this issue any further at this time </li></ul>4. Transition <ul><li>Currently little interest or appetite to remove existing copper network </li></ul>Policy position Consultation outcome Issues
    7. 7. Why is Ofcom promoting Ethernet ALA? <ul><li>Like most regulators, we prefer infrastructure access </li></ul><ul><li>We are also promoting sub-loop unbundling and looking at duct access </li></ul><ul><li>But these are unlikely to be viable everywhere – like LLU </li></ul><ul><li>So some form of bitstream access is essential </li></ul><ul><li>And the better it is, the more innovation will follow </li></ul><ul><li>And the more consumers will benefit </li></ul><ul><li>Other regulators are also looking at active line access type products </li></ul>What should this mean for communications providers? <ul><li>The availability of a standardised wholesale access product sooner rather than later </li></ul><ul><li>Giving easy access to fibre communities wherever they may be </li></ul><ul><li>Supporting wholesale and retail products </li></ul><ul><li>And allowing for differentiation in pricing, quality of service, security, applications etc </li></ul><ul><li>The opportunity to compete in the superfast broadband market without major infrastructure investment </li></ul>
    8. 8. Key competitive requirements of Ethernet Active Line Access <ul><li>There is no universally economical interconnection point </li></ul><ul><li>To allow CPs to innovate in CPE functionality </li></ul><ul><li>Bandwidth savings in backhaul of one to many services (e.g. IPTV) </li></ul><ul><li>Satisfactory delivery of voice and video </li></ul><ul><li>Secure delivery of services </li></ul><ul><li>Authentication of users </li></ul>Justification <ul><li>Local, regional, national interconnect </li></ul><ul><li>Common interface </li></ul><ul><li>Freedom to move </li></ul>Flexible interconnection <ul><li>Common Ethernet interface (initial) </li></ul><ul><li>Wires- / Fibre-only interface (future) </li></ul>Flexible customer premises equipment Multicast enablement QoS enablement Security enablement Functionality <ul><li>Choice between ALA-provider and ALA-user implemented solution </li></ul><ul><li>Common interface </li></ul><ul><li>Static and dynamic support </li></ul><ul><li>ALA-provider offers QoS information </li></ul><ul><li>ALA-user labels traffic </li></ul><ul><li>Separate traffic streams </li></ul><ul><li>ALA-users implement own security </li></ul>Technical requirements
    9. 9. The NGA Variation <ul><li>Undertakings restrict Openreach to the control and operation of assets within the Physical Layer of the access and backhaul network </li></ul><ul><li>Openreach cannot control or operate assets in the Transmission Layer (i.e. electronics) </li></ul>Undertakings obligations <ul><li>BT requested a variation to allow Openreach to control and operate electronics in street cabinets to deliver NGA products using FTTC </li></ul>BT’s variation request In return we have sought commitments on <ul><ul><ul><li>To allow co-investment </li></ul></ul></ul><ul><ul><ul><li>To use the same processes wherever possible </li></ul></ul></ul><ul><ul><ul><li>To implement in a way that will not foreclose future use of passives </li></ul></ul></ul>
    10. 10. Outstanding policy issues (1) <ul><li>How to promote competition based on passive inputs? </li></ul><ul><ul><li>EC draft recommendatin strongly favoured passives </li></ul></ul><ul><ul><li>Interest so far from CPs has been very limited </li></ul></ul><ul><ul><li>joint investment in FTTC uncertain </li></ul></ul><ul><ul><li>Results of duct survey suggest that duct access may have some potential </li></ul></ul><ul><ul><li>Ofcom’s aim has been to keep the options open </li></ul></ul>Potential architecture for Coordinated Investment
    11. 11. Outstanding policy issues (2): duct survey shows significant availability, but difficulties remain <ul><li>The survey shows significant availability, although availability appears higher closer to the metro-node then to the cabinet </li></ul><ul><li>Level of end-to-end routes availability will be lower than headline results - a third of all sections showed some ‘congestion’**. </li></ul>51% of ducts appear to have space for 3 or more new sub-ducts* that could be used for fibre <ul><li>Survey results are encouraging, but further work necessary to understand how duct can promote competition . </li></ul><ul><li>NGA consultation showed some interest in duct access for the first time, but only from 2 CPs </li></ul><ul><li>Policy position: </li></ul><ul><ul><li>Wait for clear industry demand before pushing duct </li></ul></ul><ul><ul><li>Consider expanding survey to looks at cabinet to home, non BT duct </li></ul></ul><ul><ul><li>Look further at practical ways of overcoming operational challenges </li></ul></ul>*25mm tubes were used as proxy for average sub duct **Congestion defined as not having at least three half empty ducts
    12. 12. <ul><li>How far will market drive investment in FTTC? </li></ul><ul><ul><li>Will BT’s plans be focused on responding to Virgin in cable areas? </li></ul></ul><ul><ul><li>But economics of cabinet deployment are less variable than economics of LLU deployment, so widespread deployment may be viable </li></ul></ul><ul><li>Digital Britain now looking at options for promoting NGA rollout </li></ul><ul><li>Broader implications for BT Undertakings </li></ul><ul><ul><li>Consider implications of OR focus on active products </li></ul></ul><ul><li>new WLA market review, commencing Q3 2009 </li></ul><ul><li>And beyond ?  </li></ul>Outstanding policy issues (3)